Prices of posh condos surge 5%

Check out these other price jumps.

According to Savills Residential Sales Briefing, following the curbs on shoebox units in September, the government released another property measure in October to restrict all home-loan tenures to a maximum of 35 years.

Here's more from Savills:

Home buyers with an outstanding loan and who now require another housing loan which extends past their retirement age of 65 can only borrow up to 40% of a property’s value, with the rest being payable by cash.

Alternatively, buyers could take shorter loans if they do not wish to pay a larger amount upfront. This new measure comes hot on the heels of banks offering longer loan tenures and an increasing number of buyers leveraging themselves beyond the usual 25 to 29 years.

The Monetary Authority of Singapore has warned that more households in Singapore have increased their borrowing compared with last year. Given a low interest-rate environment and ample liquidity flowing into Singapore, especially following the latest phase of quantitative easing, the property curbs are deemed necessary to deter buyers, especially older purchasers, from overstretching their finances in more than one property investment.

With shorter loan tenures, the new rule has the effect of increasing interest rates and the monthly cash payment for home buyers. The higher monthly instalment may erode the monthly rental received from these investment properties, thus trimming some demand from second- and third-home purchasers.

According to Savills data, the average unit price of luxury condos in Singapore posted a second quarterly rise of 2% QoQ from S$2,350 per sq ft to S$2,395 per sq ft in Q4/2012.

For the full year of 2012, luxury condo prices have risen 5% from S$2,286 per sq ft in Q4/2011, but are still 4% lower than the peak price of S$2,495 per sq
ft in Q4/2007.

According to data from the URA, the median price of resale condos rose 5.0% QoQ from S$1,062 per sq ft to S$1,115 per sq ft in Q4/2012, and 15% YoY from S$971 per sq ft.

The median price for new condos saw a larger increase of 13% QoQ from S$1,076 per sq ft to S$1,221 per sq ft in Q4/2012. On a YoY basis, prices rose 10% from S$1,106 per sq ft.

Prices of new condos in the city fringe rose 5% QoQ to S$1,462 per sq ft, while resales in the same region rose 7% QoQ to S$1,223 per sq ft. In the suburban areas, new homes saw a 23% QoQ leap from S$925 per sq ft in Q3 to S$1,137 per sq ft in Q4.

Resales in the suburban areas posted a smaller increase of 4% QoQ to S$937 per sq ft.

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